Network Position, Absorptive Capacity and Firm Success.

Preliminary Draft- please only quote with permission of the authors Interaction between firms or institutions in a regionally bounded area leads to a substructure conductive for innovative activities. In a vital regional innovation system the actors benefit from a multilayer network consisting of business relations, innovative cooperations and daily personal contacts by which they get access to external innovative impulses. We ask in this paper whether these knowledge flows and the way firms attempt to manage them have a positive influence on firm success. Our analysis is based on data from an industrial sub-region of Jena, Jena-Göschwitz. We find that knowledge management is positively related to a firm’s central network position, particularly in the research cooperation network. This central position in turn plays no significant role with respect to expected economic success and innovative performance. Moreover, what is decisive for that is the firms propensity to engage in research cooperation with suppliers in the region (not concentrated on the bounded network under consideration), with national public research and foreign customers respectively. Especially the last finding illustrates the necessity of so-called global pipelines for firms situated in a regional innovation system